The renewal of quality assurance in Australian higher education comes at a time when the higher education sectors in Australia and around the world are experiencing a number of key challenges. These include: ongoing decline in public funding of universities; the massification of higher education and demand for it during global recession; governments' focus on increasing enrolments in universities and particularly on access and participation by students from disadvantaged backgrounds; the rise of private for-profit higher education; use of ICT in learning; and the increased diversity of student populations. These challenges, together with the government's interest in quality assurance, a key element in the Australian labour party's political platform, are driving reforms in higher education. In this article, the authors discuss proposed changes to the new quality assurance framework in Australian higher education and its impact on the sector. The proposed changes such as performance-based funding, establishment of the "My University" website and using student satisfaction (happiness) may result in damage to university and academic autonomy, with huge reliance on student surveys to assess and reward educational quality. The proposed changes if effectively implemented will be the most significant reforms in higher education in Australia.